Corporate Governance Environment Research Articles

The divergence and driving factors of corporate environmental information disclosure in China

Abstract Corporate environmental information disclosure (EID) has been a widely acknowledged issue in the field of ecological environment research. This paper explores the spatiotemporal evolution characteristics of EID in China from 2008 to 2022, and discusses the industry and regional heterogeneity. It reveals significant differences in EID between heavy and non-heavy polluting industries, as well as among different economic regions, revealing that there is still significant potential for improvement in corporate environmental governance. Further, this paper establishes a two-way fixed effects model and empirically investigates the effects of internal and external driving factors on EID. In addition, Lasso regression model is used to screen the vital driving factors and analyze their relative importance. The empirical results show that enterprise size, management age, operating capacity, supervisory board size, and debt capacity have relatively more substantial explanations for changes in EID, which are more critical driving factors. The contribution of the study is to provide valuable reference for constructing corporate EID indicator system, and to points out the direction for the sustainable development of enterprises in different industries and regions. At the same time, it has theoretical guiding significance for finding the factors that promote EID and strengthening regional environmental governance.

Identifying transitions in corporate sustainability reporting: a content analysis of JSE/FTSE multinational sustainability reports from 2016 to 2021

The dominant practice governing sustainability reporting in the private sector is that of Corporate Social Responsibility (CSR) or Environmental Social Governance (ESG) reporting. CSR has its roots in philanthropy and charitable initiatives, while ESG aims to integrate environmental, social, and governance factors into business practices and decision-making. This paper analyses the transition in sustainability worldviews revealed in corporate sustainability reporting from 2016 to 2021. It uses a longitudinal content analysis methodology applied to a sample of ten multinational companies listed on the South African JSE/FTSE top 40 index. The period for the longitudinal study is framed from when the companies started reporting on ESG. The JSE/FTSE was chosen as the companies listed in the top 40 represent 80% of the value on the JSE (JSE 2020). The qualitative content analysis makes use of the five stages of corporate sustainability model to position companies’ sustainability reports within these five stages (Landrum & Ohsowski, 2018a). The key finding of this paper is that multinational companies have been slow to transition their sustainability reporting practices. The current reports reflect a business-as-usual mindset that is driven by compliance with reporting regulations. There is an absence of reporting that reflects a view of embedding business operations within bounded science-based ecological and social environments.

Does environmental governance mitigate the detriment of greenwashing on innovation in China?

The study examines the impact of greenwashing on corporate innovation and its governance mechanisms using a sample of 1337 Chinese A-share listed enterprises from 2009 to 2021. The results indicate that greenwashing behavior inhibits corporate innovation output, adversely affecting long-term value realization. More importantly, we explore positive roles of government and corporate internal environmental governance measures in regulating corporate deceptive “greenwashing” behavior. Through environmental policy tools, such as environmental subsidies and penalties, governments can provide positive incentives and negative constraints for corporate environmental governance. Furthermore, improving green investment and board environmental background can build a virtuous corporate internal incentive mechanism. Both inhibit the costs and incentives of greenwashing, prompting enterprises to focus more on long-term development and innovation investment. Additionally, greenwashing has more significant effects in green innovation, high-tech industries, and high-financing constrained enterprises. Our findings provide new insights into the economic consequences of greenwashing and its effective governance measures.

Trends in Corporate Environmental Compliance Research: A Bibliometric Analysis (2004–2024)

Against the backdrop of the global energy crisis and climate change, corporate environmental compliance has emerged as a key aspect of environmental regulation and a focal point of academic interest. It plays a crucial role in alleviating regulatory pressure, enabling green innovations, enhancing performance, and fostering sustainable development. Despite extensive research in the field, comprehensive reviews and bibliometric analyses remain scarce. To address this gap, this study meticulously analyzed 851 papers indexed in the WoS’s SSCI and SCI from 2004 to 2024. Using visualization tools like VOSviewer and CiteSpace, it conducted a multidimensional bibliometric analysis and systematic review, identifying core authors such as Aseem, Ntim, and Zeng, high-productivity countries including China, the USA, and the UK, and key journals like the Journal of Cleaner Production and Sustainability. Keyword co-occurrence and cluster analysis revealed central research themes of environmental information disclosure, innovation, and environmental management systems. Burst analysis highlighted emerging hot topics, notably ecological and green innovation, and the interplay between Total Factor Productivity and environmental regulations. Additionally, we identified several critical gaps in the field. For instance, research on corporate environmental governance mechanisms in the context of digital transformation remains insufficient. Furthermore, the effectiveness of multi-stakeholder collaborative governance frameworks requires ongoing investigation. Therefore, we encourage future researchers to focus on the following topics: digitization and environmental compliance, multi-stakeholder participation mechanisms, cost–benefit analysis of corporate environmental compliance, and the impact of political and regulatory environments on corporate environmental compliance.

Corporate Governance Dynamics and Financial Performance: Analysis of Listed Commercial Banks in the Ghanaian Context"

This study aims to determine the effect of corporate governance on the financial performance of 14 listed commercial banks in Ghana. The research employs a panel data set from 2008 to 2020 to examine how board size, ownership structure, board independence, capital adequacy ratio, audit committee effectiveness, board gender diversity, and overall corporate governance score affect ROA and ROE for banks. These relationships are analyzed using Ordinary Least Squares (OLS) regression within the framework of panel data analysis. Results indicate that ROA is positively related to board size, board independence, audit committee, and Board gender diversity. Also, ROE is positively influenced by companies’ ownership structure, capital adequacy ratio, audit committee effectiveness, and overall corporate employment governance rating. However, there is a significant negative correlation between ROE and women’s representation or board gender diversity. Also, another key finding is that both Return on Assets (ROA) and Return on Equity (ROE) are significantly affected by debt and debt-to-equity ratios. This indicates that banks borrowing more have reduced profitability, underlining the need for a well-managed capital structure and no over-reliance on loans. This study contributes to the understanding of the relationship between corporate governance and performance in the banking sector of Ghana, emphasizing that high-quality governance systems can improve and enhance financial performance. The insight gained from this analysis shows that Banks should aim towards good corporate governance practices such as; maintaining proper board size, promoting greater board independence, ensuring efficient audit procedures, and encouraging more gender diversity to enhance profitability. The outcomes also emphasized a well-built base of capital and concentrated ownership, enabling better financial results.The outcomes of this research are useful to Ghanaian policymakers, regulators, and bank executives who view the need for strong corporate governance environments to buttress the stability and growth of the banking sector.

Advances in amelioration of air pollution using plants and associated microbes: An outlook on phytoremediation and other plant-based technologies

Globally, air pollution is an unfortunate aftermath of rapid industrialization and urbanization. Although the best strategy is to prevent air pollution, it is not always feasible. This makes it imperative to devise and implement techniques that can clean the air continuously. Plants and microbes have a natural potential to transform or degrade pollutants. Hence, strategies that use this potential of living biomass to remediate air pollution seem to be promising. The simplest future trend can be planting suitable plant-microbe species capable of removing air pollutants like SO2, CO2, CO, NOX and particulate matter (PM) along roadsides and inside the buildings. Established wastewater treatment strategies such as microbial fuel cells (MFC) and constructed wetlands (CW) can be suitably modified to ameliorate air pollution. Green architecture involving green walls and green roofs is facile and aesthetic, providing urban ecosystem services. Certain microbe-based bioreactors such as bioscrubbers and biofilters may be useful in small confined spaces. Several generative models have been developed to assist with planning and managing green spaces in urban locales. The physiological limitations of using living organisms can be circumvent by applying biotechnology and transgenics to improve their potential. This review provides a comprehensive update on not just the plants and associated microbes for the mitigation of air pollution, but also lists the technologies that are available and/or can be modified and used for air pollution control. The article also gives a detailed analysis of this topic in the form of strengths-weaknesses-opportunities-challenges (SWOC). The strategies mentioned in this review would help to attain corporate Environmental Social and Governance (ESG) and Sustainable Development Goals (SDGs), while reducing carbon footprint in the urban scenario. The review aims to emphasise that urbanization is possible while tackling air pollution using facile, green techniques involving plants and associated microbes.

Public Perception of Climate Risk, Environmental Image, and Corporate Green Investment

Climate risk has garnered greater attention in recent years, increasing the public’s demand for climate change information. Public attention to climate risk has also increased corporate environmental governance pressure, which inevitably has an impact on the green investment of enterprises. To deepen the understanding of the issue, this article uses Chinese A-share listed manufacturing companies as a research sample from 2018 to 2022 to investigate the impact of public climate risk perception on corporate green investment. This research found that public perception of climate risk can help to promote green investment among enterprises; its route of action is generally achieved through green technological innovation; and an environmentally conscious image can strengthen the promotion effect of the public perception of climate risk on green investment. Further, public perceptions of climate risk contribute more to corporate green investment and the moderating effect of environmental image is more significant in regions with low levels of environmental regulation. This study not only helps to improve the level of public participation in climate governance, but also accounts for environmental regulation limitations. Clear enterprise differentiation and preventive green investment have a positive impact on enterprises and has the ability to improve climate governance and help companies consciously fulfill their environmental responsibility.

Corporate environmental governance under the coordination of fiscal and financial policies: The case of green credit subsidy policy

This study analyzes data from China's A-share non-financial listed firms (2009–2020) using a DID model to assess how green credit subsidy policies affect corporate environmental performance. Findings show significant performance improvements in heavily polluting companies, attributable to enhanced innovation and reduced operational costs, as confirmed by robustness tests. The policy's impact is more significant on non-state, small and medium-sized, and companies in less developed regions.

Rational Thinking on Accounting Firms' Assurance of Corporate Internal Control Reports

In the current corporate governance environment, the role of accounting firms in certifying internal control reports is increasingly emphasized. The internal control system of a company is crucial for risk management and the quality of information disclosure. It not only encompasses the definition and composition of the internal control system but also includes the principles and objectives for achieving corporate goals. Within this framework, the certification work of accounting firms is particularly important, as it not only verifies the effectiveness of internal controls but also plays a crucial role in maintaining market order and protecting investor interests. However, accounting firms face numerous challenges and constraints in the process of certifying internal control reports. These challenges include the complexity of internal control systems, as well as issues related to maintaining independence and objectivity, and enhancing professional judgment. Rational analysis of these challenges and constraints is crucial for improving the quality and efficiency of certification work. To address these challenges, a series of strategies and suggestions have been proposed. Firstly, strengthening the independence and objectivity of accounting firms is fundamental, requiring firms to optimize their organizational structure and business processes accordingly. Secondly, enhancing the ability to exercise professional judgment is key, necessitating accountants to continually improve their professional knowledge and practical experience. Finally, developing effective strategies to address challenges, such as adopting advanced technological tools and methods, can significantly improve the accuracy and efficiency of certification work. In conclusion, accounting firms play an indispensable role in certifying internal control reports. By continuously improving certification methods and enhancing professional capabilities, not only can the quality of internal control reports be enhanced, but also contribute to the healthy development of the market. Despite facing challenges, rational analysis and effective strategies can ensure that accounting firms maximize their value in this process.

The role of political party in firm environmental governance: evidence from China

ABSTRACT The importance of corporate environmental governance and compliance in China is on a noticeable rise. Meanwhile, as the sole governing entity, the Chinese Communist Party’s involvement in the business landscape has sparked extensive interest. In this paper, we use the difference-in-difference framework and show that the mandatory requirement to establish a Communist Party branch within a firm after 2018 significantly reduces the likelihood of receiving environmental penalties. Furthermore, our findings indicate heterogeneous effects across firms as the results are more pronounced for firms that belong to heavily polluted industries, operate in regions with low air quality, or have CEOs and executives without green experience. Additionally, we provide evidence that green innovation can serve as a strategy for firms to enhance their environmental initiatives, consequently leading to a reduction in the penalties they incur. Finally, we demonstrate that firms with Party branches undergo a simultaneous decrease in government environmental subsidies and a reduction in both air and water pollutant emissions after 2018, a series of parallel outcomes attributable to enhanced governance brought about by the Party branch. Our study offers valuable insights into the considerable influence the government has on corporate decision-making and contributes to the emerging literature on environmental compliance.

Integration of Environmental, Social and Governance (ESG) Factors in Financial Reporting: A Global Perspective

The integration of Environmental, Social and Governance (ESG) considerations in financial reporting is increasingly receiving significant attention, driven by increasing investor demand and corporate social responsibility. Internal factors in an organization, such as the composition of the board of directors, financial performance, internal control system, corporate governance, and institutional environment, have a significant influence on ESG integration. This research analyzes the role of internal factors in influencing ESG practices, highlighting the importance of diverse leadership, financial stability, effective control systems, disclosure transparency, and a stable institutional environment. By paying attention to these factors, companies can improve their ESG practices, reduce risks, and make a greater contribution to sustainable economic, social, and environmental development.

Negative Media Coverage and Corporate ESG Performance: Evidence from China

Using Chinese A-share listed companies from 2011 to 2020 as a research sample, this paper examines the relationship between negative media coverage and corporate ESG performance using a two-way fixed-effects model. It is found that, first, negative media coverage can effectively promote corporate ESG performance. Second, the mediation mechanism study shows that negative media coverage positively promotes corporate ESG performance by increasing the degree of corporate financing constraints and information asymmetry and prompting corporations to change their ESG governance level. Third, the results of the heterogeneity test find that the positive relationship between negative media coverage and corporate ESG performance is more pronounced among firms without executives with overseas backgrounds, and the positive relationship between the two is more significant after the promulgation of China’s Code of Governance for Listed Companies in 2018. Fourth, further discussion revealed that negative media coverage has the strongest promotion effect on the performance of corporate environmental governance, followed by social governance performance, and lastly, corporate governance performance. The research in this paper contributes to an in-depth understanding of the impact of negative media coverage on corporate ESG performance and provides empirical evidence to facilitate policy formulation related to the role of media monitoring and to fully utilize the media’s role in corporate ESG governance.

Economic Incentives for Pollution Control in China Through the Lens of the Carbon Trading Market and Its Effectiveness and Challenges

This paper explores the pivotal role of economic incentives in pollution control within the People’s Republic of China, centering specifically on the intricacies and operational dynamics of the carbon trading market. As an integral component of China’s environmental policy and broader economic strategy, the carbon trading market is posited as a critical mechanism for catalyzing reduction in greenhouse gas emissions across various industrial sectors. Through a detailed examination, this study assesses the efficacy of the market in achieving its intended environmental outcomes, alongside a thorough investigation of the challenges and obstacles that impede its operation. At the heart of this analysis is a comprehensive review of how the carbon market has been implemented in China, including the regulatory frameworks, market design, and participation criteria that underpin its functionality. The paper delves into the market’s direct impacts on industries, especially those traditionally associated with high levels of carbon emissions, assessing how economic incentives have spurred or, in some instances, failed to spur significant environmental improvements. Further, the study broadens its scope to consider the carbon trading market’s implications for sustainable development in China. It explores the balance between economic growth and environmental sustainability, investigating how the carbon market aligns with China’s long-term goals for green development. This includes an analysis of the market’s role in promoting technological innovation and investment in renewable energy sources, as well as its influence on corporate behavior and environmental governance. The paper also addresses the multifaceted challenges that confront the carbon trading market in China. These include issues related to market liquidity, price volatility, the accuracy of emissions data, and the enforcement of regulatory measures. Moreover, the study considers the global context, comparing China’s carbon market with international counterparts to identify unique challenges and opportunities. In synthesizing the findings, this paper aims to provide a nuanced understanding of the carbon trading market’s function as an economic incentive for pollution control in China. It highlights the critical importance of continuous refinement and adaptation of the market mechanisms to enhance their effectiveness in reducing emissions. Ultimately, this study contributes to the broader discourse on the role of economic incentives in achieving sustainable development, offering insights into the complexities of integrating environmental policies within the framework of China’s rapidly evolving economy.

Internal auditing's role in preventing and detecting fraud: An empirical analysis

Internal auditing plays a pivotal role in preventing and detecting fraudulent activities. However, the orientation and role of internal auditing in dealing with fraud risk can vary significantly across different companies. This study examines the relationship between the internal audit function (IAF) and fraud, providing new insights into the current practices of internal auditing. Using a survey dataset comprising responses from 275 Chief Audit Executives across Germany, Switzerland and Austria, we investigate factors that correlate with an increased propensity for IAFs to engage in fraud prevention and detection. Our findings suggest that a robust corporate governance environment significantly influences the extent to which the IAF is involved in preventing and detecting fraud. Shedding light on the positioning of internal auditing between management and the audit committee with respect to fraud, our results show that increased IAF involvement with management positively affects the level of activities to prevent and detect fraud, while increased IAF involvement with the audit committee has the opposite effect. Furthermore, we find that the propensity of IAFs to engage in fraud prevention and detection increases when the IAF applies technology‐based auditing techniques for risk identification. Our results have implications for building appropriate protection against the steadily increasing risk of fraud within organizations, while holistically addressing the ambiguity regarding the responsibility for preventing and detecting fraud.

Returnee directors and green innovation

This study examines the effect of returnee directors, defined as local directors who have studied or worked in foreign countries, on a firm’s green innovation. Utilising robust econometric modelling, we examine a large sample of A-share nonfinancial firms listed on the Shenzhen and Shanghai stock exchanges. Our findings reveal a positive and significant relationship between returnee directors and green innovation. Interestingly, this association remains consistent across both environmentally sensitive and non-sensitive industries. However, it becomes more pronounced when returnee directors are non-executive, function within state-owned enterprises, number more than one on the board, or operate in firms with poor internal and external corporate governance environments. Furthermore, we demonstrate that returnee directors, armed with foreign education or work experience, increase green innovation. The results withstand a series of robustness checks, including the Heckman two-step sample selection model and propensity score matching. Overall, the results suggest that returnee directors drive green innovation.

Corporate Social Responsibility and Environmental Governance in Chile

Corporate Social Responsibility and Environmental Governance in Chile

THE INFLUENCE OF FIRM KNOWLEDGE CHARACTERISTICS ON TECHNOLOGICAL INNOVATION: A MULTILEVEL NETWORK STRUCTURE PERSPECTIVE

As a necessary informal system, media attention plays a supervisory role in the implementation of formal systems such as environmental regulations, which is an important force to enhance enterprises' green technology innovation. This paper takes listed companies in heavily polluting industries in China's A-share market as the research object, selects data from 2008 to 2017, and establishes a hierarchical regression model to explore the influence of media attention and environmental regulation on enterprises' green technology innovation. The results show: (1) there is a significant positive correlation between media attention and green technology innovation; (2) command-based and market-based environmental regulations positively regulate the relationship between media attention and green technology innovation for enterprises. This paper argues that media attention plays a role in external supervision and governance, stimulating enterprises' green technology innovation behavior. Therefore, we should actively utilize media attention in corporate environmental governance and gradually strengthen both command-based and market-based environmental regulations.

Corporate environmental governance and firm value: beyond greenwashing for sustainable development

Corporate environmental governance and firm value: beyond greenwashing for sustainable development

Do industrial robots matter for corporate environmental governance? Evidence from Chinese firms

PurposeThe connection between digital manufacturing technologies (Industry 4.0) and the environment has sparked discussions on firms' disclosure of negative information on pollutant emissions and the pursuit of positive environmental outcomes. However, very few studies explore how it relates to a firm's robot usage and its mechanism. The purpose of this paper is to investigate the impacts of robot penetration on firms' environmental governance in China.Design/methodology/approachThe ordered probit model (and probit model) are employed and empirically tested with a sample of 1,579 Chinese listed firms from 2010 to 2019.FindingsThe study reveals a negative relationship between robot usage and the disclosure of negative indicators and a U-shaped relationship between robot usage and positive environmental outcomes. Among the sample, nonstate-owned enterprises (SOEs) display unsatisfactory performance, while heavily polluting industries disclose more information on pollutant emissions. The robot–environmental governance nexus is conditional on firm size, capital intensity and local economic development.Originality/valueThe study proposes a fresh view of corporate environmental governance to assess the environmental implications of robot adoption. It also contributes to identifying the curvilinear, moderating and heterogenous effects in the robot–environment nexus. The results provide rich policy implications for the development of industrial intelligence and corporate environmental governance in the circular economy (CE) context.

Public Environmental Concern and Corporate Environmental Governance

We examined the impact of public environmental concerns (PEC) on corporate environmental governance (CEG). Using Chinese listed companies in Shanghai and Shenzhen stock market as our research sample, we find that the higher the regional PEC, the better the level of CEG, and the positive effect of PEC on CEG is more significant in the sample of non-state owned enterprises. An examination of the influence mechanism finds that PEC increase government environmental attention and therefore more stringent government environmental regulations are developed to constrain corporate environmental decisions. This study will help us better understand the unique role of the public in corporate environmental strategy in the Internet era.